By: Mahmoud Gamal
Abu Dhabi – Mubasher: Most of the Abu Dhabi- and Dubai-listed banks have reduced their non-performing loans' (NPLs) provisions by 11.2% in the first quarter of 2018.
Bad debt provisions of 18 UAE-listed banks declined to AED 2.93 billion in Q1-18 from AED 3.31 billion in the year-ago period, Mubasher’s data showed.
The decrease in the UAE banks provisions in the first three months of 2018 is an indicator of the reduction of bad debts and the national economic growth, despite the pressures those banks face to comply with Basel III standard, analysts said.
Basel III requirements entail higher liquidity and hedging policies, which require banks to maintain a large capital base.
Some banks have resorted to cut administrative expenses to boost their financial results, Wadah Al-Taha, member of the National Advisory Board of Chartered Institute for Securities &Investments (CISI) told Mubasher.
Banks’ effort to meet Basel III requirements will lead them to take three measures in the coming period, namely the increase of their capital, issuing bonds or sukuk, or mergers, Al-Taha added.
In the first quarter of the year, the UAE banks stabilised their financial positions and enhanced the quality of their assets, senior financial analyst at Mena Corp Issam Kassabieh.
Translated by: Muhammad Khalid
